Izvestia: "Putin’s test drive"
Prime Minister Vladimir Putin will personally test a new economy car, the LADA Granta, which will replace the Kalina and other popular cars produced by the Togliatti-based company AvtoVAZ. Although the new car will be presented with pomp, experts have quite a few complaints about it.
After Putin's rally in the yellow LADA Kalina last summer, AvtoVAZ quickly had to add the new colour to the model range because so many customers wanted the prime minister's version. AvtoVAZ hopes that today's test drive will have a similar effect. This time Putin will drive the Granta (LADA 2190) at its presentation during the congress of Machine Builders in Togliatti.
Izvestia learned that the prime minister will test drive the cheapest version of the car in the standard package (220,000 roubles). It will replace the AvtoVAZ 2105 model and it is on this car that the plant is placing its bets. There will be luxury and sport models as well, but it is unlikely that there will be a mass demand for them. The colours will be the same as for the Kalina, plus dark metallic blue, which will be called the "Granta."
The Granta figures into the AvtoVAZ development programme, which runs through the year 2020, under the section "survival" (2010-2013). The model range will have three stages of modernisation. This car is not entirely new – 70% of its components were borrowed from the Kalina. Many components will be imported, however, such as radiators, heaters, window regulators, door locks, thermostats and luggage rack locks.
Renault (the owner of 25% of AvtoVAZ shares) is participating in this project, which inspires some measure of hope for good quality. Oleg Datskiv, general director of the web portal auto-dealer.ru, notes that Western car-makers will not take part in producing low-quality cars.
The new economy model is a good thing, but it won't carry away all their problems by itself, analysts say. The main question is whether Granta will guarantee AvtoVAZ good performance after the completion of the car scrapping program (most likely, the last exchange certificates will be given out before the start of Granta's official sales in December).
"Considering tough competition from other economy cars (the Renault Logan costs a comparable amount), it will be difficult to achieve this goal without additional incentives," said the assets manager of the BKS investment company Nikolai Solabuto. He described the production of a new model as "an expensive attempt to give AvtoVAZ a second wind." "It would be much more logical to stop the production of domestic cars and to switch to the Logan, for instance, all the more so since Renault is a key shareholder in AvtoVAZ," he said.
Vladimir Bragin from Alfa Capital agrees: "The emergence of a new model is not a guarantee of prosperity. It will still have to compete with the models of other producers in the market."
The car scrapping program accounts for 80% of AvtoVAZ sales. Before its start, the plant sold 17,000-18,000 cars per month, and after its launch sales increased to 50,000 cars per month. As a result, AvtoVAZ received $3.6 billion in net profit according to international financial reporting standards (IFRS) as compared to $49.2 billion losses in 2009.
Yelena Shishkunova
